President Bush signed legislation on Dec. 31, in Crawford, Texas allowing state and local governments to cut investment ties with companies doing business in Sudan, even as he expressed concerns that the bill could interfere with his right to set foreign policy.

According to The New York Times, the measure, called the Sudan Accountability and Divestment Act, is aimed at pressuring Sudan to end the violence in the Darfur region, where 200,000 people have been killed and more than two million driven from their homes in a four-year conflict that Mr. Bush has termed a genocide.

The bill, which passed both houses of the U.S. Congress unanimously, makes it easier for mutual funds and private pension fund managers to sell their investments and allows states to prohibit debt financing for companies that do business in Sudan. It also requires companies seeking contracts with the federal government to certify that they are not doing business in Sudan.

"I share the deep concern of the Congress over the continued violence in Darfur perpetrated by the government of Sudan and rebel groups," Bush said in a statement issued from his ranch.

But the administration has expressed reservations about the bill.